In a tweet today, Tesla CEO Elon Musk said the company will not continue to accept Bitcoin as payment for its vehicles, citing the cryptocurrency’s energy expenditure.
We are concerned about the rapid increase in the use of fossil fuels for mining and Bitcoin transactions, especially coal, which has the worst emissions of any fuel.
Tesla & Bitcoin pic.twitter.com/YSswJmVZhP
– Elon Musk (@elonmusk) May 12, 2021
Tesla started accepting BTC as payment earlier this year, after reporting an investment of $ 1.5 billion in the currency. The automaker’s entry into the market precipitated a price increase – from $ 39,000 at the time of the announcement on February 8 to $ 53,000 a week later.
This has led to some setback on the part of climate-conscious consumers, who found Tesla’s onslaught on Bitcoin at odds with its pro-environment image.
Bitcoin uses something called proof of work to coordinate the consensus of all computers running the software. To protect the network, specialized computers try to solve complex cryptographic puzzles. The first to do this wins newly minted Bitcoin. As speed is important, “miners” with greater computing power win more often. And that energy consumes a lot of electricity. A recent study by the University of Cambridge placed annual energy consumption higher than that of Argentina.
But, many say that much of the network works with clean and renewable energy sources, including hydroelectric power. A September 2020 report, also from Cambridge, estimates the number at 39%. CoinShares, the crypto asset manager, reaches 77%.
But Musk has seen enough, at least for now. “Tesla will not sell any Bitcoin and we intend to use it for transactions as soon as mining makes the transition to more sustainable energy,” he wrote, before suggesting that the company may invest in cryptocurrencies with a smaller carbon footprint.